AppFolio, Inc. Announces Fourth Quarter and Fiscal Year 2020 Financial Results

Rhea-AI Summary

AppFolio, Inc. (NASDAQ: APPF) announced its financial results for Q4 and the fiscal year ending December 31, 2020. The company did not provide revenue guidance for fiscal year 2021 due to uncertainties in business trends. It expects diluted weighted average shares to be around 36 million for FY 2021. Investors are encouraged to review the Annual Report on Form 10-K, filed today, for comprehensive insights. A conference call to discuss results is scheduled for March 1, 2021, at 1:30 p.m. PT.

Positive

• None.

Negative

• No revenue guidance provided for FY 2021 due to limited visibility into future business trends.
• Uncertain operating environment may affect financial performance.

SANTA BARBARA, Calif., March 01, 2021 (GLOBE NEWSWIRE) -- AppFolio, Inc. (NASDAQ: APPF) ("AppFolio" or the "Company"), today announced its financial results for the fourth quarter and fiscal year ended December 31, 2020. The Company urges investors to read its Annual Report on Form 10-K for the year ended December 31, 2020, which will also be filed with the Securities and Exchange Commission (the "SEC") today, March 1, 2021, and will be available on AppFolio's website, http://ir.appfolioinc.com. The limited information that follows in this press release is not adequate for making an informed investment judgment.

Financial Outlook

The Company is not providing revenue guidance for fiscal year 2021 due to limited visibility into future business trends and financial performance in the current operating environment. Diluted weighted average shares are expected to be approximately 36 million for fiscal year 2021.

Conference Call Information

As previously announced, the Company will host a conference call today, March 1, 2021, at 1:30 p.m. Pacific Time, 4:30 p.m. Eastern Time, to discuss its financial results. Participants who wish to dial into the conference call please register in advance at http://www.directeventreg.com/registration/event/8438087. After registering, a confirmation email will be sent, including dial-in details and a unique code for entry. Registration will be open through the start of the live call.

Following the conference call, a replay will be available at (800) 585-8367 (domestic) or (416) 621-4642 (international). The replay passcode is 8438087. An archived webcast of this conference call will also be available on AppFolio’s Investor Relations website at http://ir.appfolioinc.com.

About AppFolio, Inc.

AppFolio provides innovative software, services and data analytics to the real estate industry. Our industry-specific, cloud-based business management solutions are designed to enable our customers to digitally transform their businesses, address critical business operations and enable exceptional customer service. Today our core solutions include AppFolio Property Manager, AppFolio Property Manager PLUS, and AppFolio Investment Management. In addition, the Company offers a variety of Value+ services that are designed to enhance, automate and streamline essential processes and workflows for our customers. AppFolio was founded in 2006 and is headquartered in Santa Barbara, CA. Learn more at www.appfolioinc.com.

Investor Relations Contact: ir@appfolio.com

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements are subject to considerable risks and uncertainties. Forward-looking statements include all statements that are not statements of historical fact contained in this press release, and can be identified by words such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts, “projects,” “seeks,” “should,” “will,” “would” or similar expressions and the negatives of those expressions. In particular, forward-looking statements contained in this press release relate to the Company's business opportunities, the impact of the Company's strategic actions and initiatives, the impact of the COVID-19 pandemic on the Company's business, and the timing of providing updated financial guidance.

Forward-looking statements represent AppFolio's current beliefs and assumptions based on information currently available. Forward-looking statements involve numerous known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Some of the risks and uncertainties that may cause the Company's actual results to materially differ from those expressed or implied by these forward-looking statements are described in the section entitled “Risk Factors” in AppFolio's Annual Report on Form 10-K for the year ended December 31, 2020, which will be filed with the SEC today, as well as in the Company's other filings with the SEC. You should read this press release with the understanding that the Company's actual future results may be materially different from the results expressed or implied by these forward looking statements.

Except as required by applicable law or the rules of the NASDAQ Global Market, AppFolio assumes no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except par values)
		December 31, 2020				December 31, 2019
Assets
Current assets
Cash and cash equivalents		$	140,263			$	15,813
Investment securities—current		28,256				22,876
Accounts receivable, net		10,057				7,562
Prepaid expenses and other current assets		20,777				15,540
Total current assets		199,353				61,791
Investment securities—noncurrent		6,770				12,089
Property and equipment, net		26,439				14,744
Operating lease right-of-use assets		30,561				27,803
Capitalized software development costs, net		35,459				30,023
Goodwill		56,147				58,425
Intangible assets, net		16,357				21,377
Deferred taxes		12,181				27,574
Other long-term assets		6,213				6,276
Total assets		$	389,480			$	260,102
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable		$	1,040			$	1,927
Accrued employee expenses		18,888				17,758
Accrued expenses		14,069				10,833
Deferred revenue		2,262				4,600
Income tax payable		9,095				—
Other current liabilities		4,451				11,139
Term loan, net—current portion		—				1,208
Total current liabilities		49,805				47,465
Operating lease liabilities		40,146				33,312
Term loan, net		—				47,375
Deferred taxes		13,609				—
Total liabilities		103,560				128,152
Stockholders’ equity:
Preferred stock, $0.0001 par value, 25,000 shares authorized and no shares issued and outstanding as of December 31, 2020 and December 31, 2019		—				—
Class A common stock, $0.0001 par value, 250,000 shares authorized as of December 31, 2020 and December 31, 2019; 19,148 and 16,923 shares issued as of December 31, 2020 and December 31, 2019, respectively; 18,729 and 16,552 shares outstanding as of December 31, 2020 and December 31, 2019, respectively		2				2
Class B common stock, $0.0001 par value, 50,000 shares authorized as of December 31, 2020 and December 31, 2019; 15,659 and 17,594 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively		2				2
Additional paid-in capital		161,247				161,509
Accumulated other comprehensive income		56				33
Treasury stock, at cost, 419 and 371 shares of Class A common stock as of December 31, 2020 and December 31, 2019, respectively		(25,756		)		(21,562		)
Retained earnings (accumulated deficit)		150,369				(8,034		)
Total stockholders’ equity		285,920				131,950
Total liabilities and stockholders’ equity		$	389,480			$	260,102

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2020(1)				2019				2020(1)				2019
Revenue		$	72,432			$	67,362			$	310,056			$	256,012
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)		29,905				26,403				119,029				101,642
Sales and marketing		15,328				14,441				58,445				51,528
Research and product development		11,735				11,086				48,529				39,508
General and administrative		11,177				9,117				47,480				34,478
Depreciation and amortization		7,039				6,226				26,790				22,395
Total costs and operating expenses		75,184				67,273				300,273				249,551
(Loss) income from operations		(2,752		)		89				9,783				6,461
Other income, net		1,138				84				188,897				16
Interest income (expense), net		60				(330		)		(1,849		)		(1,654		)
(Loss) income before (benefit from) provision for income taxes		(1,554		)		(157		)		196,831				4,823
(Benefit from) provision for income taxes		(1,041		)		(4,585		)		38,428				(31,459		)
Net (loss) income		$	(513	)		$	4,428			$	158,403			$	36,282
Net (loss) income per common share:
Basic		$	(0.01	)		$	0.13			$	4.62			$	1.07
Diluted		$	(0.01	)		$	0.12			$	4.44			$	1.02
Weighted average common shares outstanding:
Basic		34,332				34,091				34,264				34,016
Diluted		34,332				35,597				35,713				35,567
(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.

Stock-Based Compensation Expense
(in thousands)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2020(1)				2019				2020(1)				2019
Costs and operating expenses:
Cost of revenue (exclusive of depreciation and amortization)		$	408			$	393			$	1,506			$	1,466
Sales and marketing		346				367				1,415				1,271
Research and product development		470				387				1,818				1,411
General and administrative		993				731				4,286				3,161
Total stock-based compensation expense		$	2,217			$	1,878			$	9,025			$	7,309
(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2020(1)				2019				2020(1)				2019
Cash from operating activities
Net income		$	(513	)		$	4,428			$	158,403			$	36,282
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,039				6,226				26,790				22,395
Amortization of operating lease right-of-use assets		728				1,114				3,701				4,130
Deferred income taxes		6,124				(4,423		)		29,002				(31,455		)
Stock-based compensation		2,217				1,878				9,025				7,309
Gain on sale of business		(22		)		—				(187,658		)		—
Other		(45		)		(104		)		125				32
Changes in operating assets and liabilities:
Accounts receivable		(553		)		747				(2,782		)		(2,031		)
Prepaid expenses and other current assets		(5,035		)		372				(5,894		)		(4,031		)
Other assets		(199		)		247				(519		)		1,376
Accounts payable		(1,598		)		241				(903		)		511
Accrued employee expenses		880				4,056				2,799				4,542
Accrued expenses		947				69				6,878				55
Deferred revenue		(285		)		154				530				1,193
Operating lease liabilities		571				224				(564		)		(2,662		)
Other liabilities		(7,173		)		245				9,366				1,241
Net cash provided by operating activities		3,083				15,474				48,299				38,887
Cash from investing activities
Purchases of available-for-sale investments		(13,998		)		(14,508		)		(43,877		)		(25,198		)
Proceeds from sales of available-for-sale investments		2,769				—				16,711				2,750
Proceeds from maturities of available-for-sale investments		14,030				4,660				27,330				15,660
Purchases of property, equipment and intangible assets		(2,487		)		(3,999		)		(19,038		)		(8,084		)
Capitalization of software development costs		(6,345		)		(5,329		)		(26,042		)		(20,998		)
Cash paid in business acquisition, net of cash acquired		—				—				—				(54,004		)
Proceeds from sale of business, net of cash divested		—				—				191,427				—
Net cash (used in) provided by investing activities		(6,031		)		(19,176		)		146,511				(89,874		)
Cash from financing activities
Proceeds from stock option exercises		420				294				822				553
Tax withholding for net share settlement		(1,237		)		(614		)		(12,196		)		(6,155		)
Payment of contingent consideration		—				—				(5,977		)		—
Proceeds from issuance of debt		—				472				50,752				2,169
Principal payments on debt		—				(785		)		(99,565		)		(3,419		)
Payment of debt issuance costs		—				—				—				(420		)
Purchase of treasury stock		—				—				(4,194		)		—
Net cash used in financing activities		(817		)		(633		)		(70,358		)		(7,272		)
Net (decrease) increase in cash and cash equivalents and restricted cash		(3,765		)		(4,305		)		124,452				(58,259		)
Cash, cash equivalents and restricted cash
Beginning of period		144,464				20,552				16,247				74,506
End of period		$	140,699			$	16,247			$	140,699			$	16,247
(1) MyCase was divested on September 30, 2020. The results of MyCase have been included in our results of operations through the date of divestiture.

FAQ

What were AppFolio's financial results for Q4 2020?

AppFolio announced its financial results for Q4 2020, urging investors to refer to the Annual Report for detailed information.

Why did AppFolio not provide revenue guidance for 2021?

AppFolio did not provide revenue guidance for FY 2021 due to limited visibility into future business trends.

How many diluted shares does AppFolio expect for FY 2021?

AppFolio expects approximately 36 million diluted weighted average shares for fiscal year 2021.

When will AppFolio hold its conference call to discuss financial results?

AppFolio will host a conference call on March 1, 2021, at 1:30 p.m. Pacific Time.